CBA posts record $8.68b profit as customers continue online push

The Commonwealth Bank of Australia has seen its cash profit for 2014 grow 12 percent to a record AU$8.68b with internet banking now handling 47 percent of the bank's transactions.
Written by Chris Duckett, Contributor

Citing its strength in technology in its annual results, the Commonwealth Bank of Australia has today announced a record cash profit of AU$8.68 billion for the 2014 fiscal year.

Representing an increase of 12 percent on its 2013 results, CBA CEO Ian Narev said that the bank had struck a balance between its short term and long term priorities.

"At the same time as delivering a 12 per cent increase in cash earnings, and a strong return on equity, we reinvested AU$1.2 billion into the business, most of which was targeted at our long term strategic priorities — people, technology, strength and productivity," he said.

In its results, the bank revealed that 47 percent of its transactions, by value, is now handled through internet banking, ahead of branch-based transactions on 39 percent, Eftpos with 10 percent, and ATM transactions handling 4 percent.

Looking at the raw number of transactions handed, Eftpos made up 62 percent of transaction, internet banking made up 21 percent, ATMs claimed 13 percent, and branch transactions handled 4 percent.

CBA has seen value transactions on the internet increase from 40 million in 2003, to 458 million in the 2014 fiscal year — over the same time period, Eftpos transactions have almost doubled from 700 million to 1372 million, ATM transactions have dropped from 325 million to 282 million in 2014, and branch transactions have fallen from 130 million to 77 million.

Within internet banking, with the use of mobile devices and tablets jumping to almost 65 percent of logins to CBA's NetBank, up from 40 percent in April 2012.

CBA reported that it handled 4.9 million balance views on mobile devices in June this year, with 756,000 similar views completed at the start of the fiscal year in June. During that time period, the bank launched its revamped Commbank app for iOS, Android, and Windows Phone 8 that saw a merger of its CommBank and Kaching apps.

The CommBank app was reported to now handle approximately 11 million logons per week and almost AU$2 billion in transactions a week from a base of 3 million users.

Australia's embracing of contactless payment options was reinforced in the results, as the bank revealed that contactless payments now make up 22 percent of all credit transactions, and the bank's contactless mobile payment option using near field communication, whether from an in-built NFC element inside an Android device or a sticker, accounted for over 1 million transactions and spending of AU$25 million since December 2013.

Although calling out its domestic technology leadership among banks, the Commonwealth Bank announced in June that it was promoting David Whiteing to the chief information officer role, replacing Michael Harte who is leaving the company to join Barclays Bank in London.

In June, a parliamentary committee called on the Australian government to commence a royal commission into Australian Securities and Investments Commission and the Commonwealth Bank of Australia to investigate CBA's wealth management arm for forgery and the attempt to cover up its wrongdoing.

The federal government has so far resisted calls to begin another royal commisssion.

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